Government Seeks Assurance Over ZSE Suspension Lift

Justin Bgoni, chief executive officer of the Zimbabwe Stock Exchange, at the Zimbabwe Stock Exchange in Harare, Zimbabwe, on Tuesday, July 11, 2023. Zimbabweans frantically trying to protect their savings from a collapsing currency have driven the country's main stock index up by 760% this year. Photographer: Cynthia R Matonhodze/Bloomberg via Getty Images
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HARARE – Amid discussions surrounding the potential reinstatement of PPC and Old Mutual Zimbabwe (OMZ) on the Zimbabwe Stock Exchange (ZSE), the government is seeking assurances to prevent exchange rate volatility, reports the Zimbabwe Independent.

In 2020, the suspension of PPC, OMZ, and Seed Co International from the ZSE stemmed from concerns over the fungibility of their stocks. This resulted in the market using these share prices to calculate an implied exchange rate, prompting the government to intervene.

Recent months have seen a commitment from the government to safeguard Zimbabwe Gold (ZiG), introduced in April, raising concerns about potential disruptions in the currency market.

At the inaugural Capital Markets Conference, industry stakeholders expressed frustration over the prolonged suspension of PPC and OMZ, citing its adverse effects on pension funds and retirees.

Justin Bgoni, CEO of ZSE, highlighted challenges within the industry, including restrictive legislation and high capital gains withholding tax, hindering market progress. Financial analyst Ranga Makwata stressed the need for collaboration between policymakers and capital markets to foster economic development.

Association of Investment Managers of Zimbabwe chairperson Shelton Sibanda emphasized the importance of attracting foreign investors, emphasizing the lifting of suspensions as a crucial step.

Responding to government concerns, Finance, Economic Development, and Investment Promotion deputy minister David Mnangagwa tasked ZSE and Securities and Exchange Commission of Zimbabwe (SecZim) with presenting a position paper to ensure that the fungibility of these shares does not exacerbate market volatility.

Bgoni affirmed ongoing efforts to find a resolution, highlighting various options under consideration, including market listing, South African sales, and involvement with the Victoria Falls Stock Exchange.

The Capital Markets Conference, a collaboration between the Zimbabwe Independent, ZSE, and SecZim, served as a platform to address critical industry issues and foster dialogue between stakeholders.